Palace gives go-signal for P1,000 increase in SSS pension
Despite an outcry from legislators and workers, Malacañang will proceed with the 1.5-percentage point increase in the contributions of Social Security System (SSS) members, saying President Rodrigo Duterte carefully studied the matter before approving it.
The premium increase is scheduled to be implemented in May, or three months after the P1,000 increase in the SSS pension of retirees this month.
The adjustment will increase the monthly contributions of active SSS members to 12.5 percent of their monthly salary credit, the maximum level of which was raised from P16,000 to P20,000.
The increase in contributions will range from P15 to P740 a month, to be shared equally by the pension fund member and the employer, according to the SSS.
Presidential Communications Secretary Martin Andanar said Mr. Duterte did not arrive at the decision lightly.
Premium increase
“The President has carefully weighed both sides to solve the SSS impasse and he has already made a decision,” Andanar said in a statement.
Sen. Franklin Drilon questioned on Wednesday the premium increase, saying the SSS charter does not allow it to raise premium rates to increase benefits.
Other groups also bucked the idea of burdening workers with higher premiums to fund the increase in the retirees’ pensions.
Investment revenue
But according to Andanar, the 1.5-percentage point increase in contributions in May would be used to improve the Investment Reserve Fund so it could generate higher yields for investments.
The increase is also intended to strengthen the overall viability of the pension fund so that it could meet future obligations, he added.
The increase in the monthly pensions of retirees, on the other hand, will be financed by current contributions and investment income, said Andanar.
A 1.5-percentage point increase is to be implemented every year until the contribution rate reaches 17 percent. Another P1,000 pension increase is expected in 2022.
An across-the-board pension increase of P2,000 was a campaign promise of Mr. Duterte.
SSS officials said earlier that reforms were underway in the pension fund for workers in the private sector to make collection of contributions more efficient and its investments more sound.
Labor unions
They are also seeking additional powers from Congress and an executive order from the President to boost the SSS campaign to improve collections and widen its contribution base.
The Associated Labor Unions (ALU) and Trade Union Congress of the Philippines lauded Mr. Duterte for approving the increase in the pensions of some 2.3 million pensioners of SSS.
“This will help pensioners to cope with some of the burdens caused by rising prices of basic commodities and cost of services,” ALU spokesperson Alan Tanjusay said in a statement.
However, ALU argued that the government should have fixed the system first and instituted reforms within SSS before requiring new contributions from 14 million paying members out of the 34 million registered members.
Tanjusay also called on SSS management to trim down excessive bonuses and introduce reasonable perks to all its top executives. —REPORTS FROM LEILA B. SALAVERRIA AND TINA G. SANTOS
